Finance Bill, 2022Key Changes Key Changes made in the Finance Bill, 2022 at Time of Passing Thereof

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The Tax Publishers Finance Bill, 2022--Key Changes Key Changes made in the Finance Bill, 2022 at Time of Passing Thereof Srivatsan Ranganathan The Finance Bill, 2022 was passed by Lok Sabha on 25th March 2022 with certain changes. This write-up highlight the key changes to the bill incorporated at the time of passing thereof. 1. Amended/Extended definition of books of account 2(12A). (Underlined Italics are amendments) As per Section 2(12A) books or books of account include ledgers, day-books, cash books, account-books and other books, whether kept in the written form or in electronic form or in digital form or as print-outs of data stored in such electronic form or in digital form or ina floppy, disc, tape or any other form of electro-magnetic data storage device. 2. Under Section 10(4D) specified funds are exempted from Capital gains tax from transfer of offshore securities in IFSC (International Financial Services Centre). Existing condition was all the units were supposed to be held by a non-resident for the specified fund to be exempt. Now this is relaxed where in any unit holder/s become resident under Section 6(1)(1A) and aggregate of the units do not exceed 5% of the total units subject to fulfillment of other conditions. 3. Institutions approved for the purposes of Section 10(23C)(iv)/(v)/(vi)/(via) to loose their approval once they get approved under Section 10(46). This provision is effect from 1-4-2022 4. Payment to specified persons under Section 13(3) in case of a trust if applied directly or indirectly for the benefit of such notified persons (related parties to a trust/fund) will be deemed to be income of the fund or institution or trust, university or other educational institution or hospital or medical institution vide Section 115BBI. The wording used in the finance bill was 'such person' giving a misleading intent that whether the person would be the recipient or the institution/trust etc. Now the wording is made clear to mean that the deeming income will be in the hands of the institution/trust and not in the hands of the recipient. 5. Consequential amendment in Section 56(2)(x) to the clarification amendment on above to avoid double taxation of the consideration received by a specified person under Section 13(3) beyond Rs. 50,000 if not in line with the FMV will be deemed to be income of the said trust/institution. So the same cannot be taxed again under Section 56(2)(x) in the hands of the beneficial recipients. Accordingly an amendment is being clarified in the Act, which was not there in the bill. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Finance Bill, 2022--Key Changes

Key Changes made in the Finance Bill, 2022 at Time of Passing Thereof

Srivatsan Ranganathan

The Finance Bill, 2022 was passed by Lok Sabha on 25th March 2022 with certain changes. This write-up highlight the key changes to the bill incorporated at the time of passing thereof.

1. Amended/Extended definition of books of account 2(12A).

(Underlined Italics are amendments)

As per Section 2(12A) books or books of account include ledgers, day-books, cash books, account-books and other books, whether kept in the written form or in electronic form or in digital form or as print-outs of data stored in such electronic form or in digital form or ina floppy, disc, tape or any other form of electro-magnetic data storage device.

2. Under Section 10(4D) specified funds are exempted from Capital gains tax from transfer of offshore securities in IFSC (International Financial Services Centre). Existing condition was all the units were supposed to be held by a non-resident for the specified fund to be exempt. Now this is relaxed where in any unit holder/s become resident under Section 6(1)(1A) and aggregate of the units do not exceed 5% of the total units subject to fulfillment of other conditions.

3. Institutions approved for the purposes of Section 10(23C)(iv)/(v)/(vi)/(via) to loose their approval once they get approved under Section 10(46). This provision is effect from 1-4-2022

4. Payment to specified persons under Section 13(3) in case of a trust if applied directly or indirectly for the benefit of such notified persons (related parties to a trust/fund) will be deemed to be income of the fund or institution or trust, university or other educational institution or hospital or medical institution vide Section 115BBI.

The wording used in the finance bill was 'such person' giving a misleading intent that whether the person would be the recipient or the institution/trust etc. Now the wording is made clear to mean that the deeming income will be in the hands of the institution/trust and not in the hands of the recipient.

5. Consequential amendment in Section 56(2)(x) to the clarification amendment on above to avoid double taxation of the consideration received by a specified person under Section 13(3) beyond Rs. 50,000 if not in line with the FMV will be deemed to be income of the said trust/institution. So the same cannot be taxed again under Section 56(2)(x) in the hands of the beneficial recipients. Accordingly an amendment is being clarified in the Act, which was not there in the bill.